PhonePe, which built its scale on the Unified Payments Interface (UPI) with over 657 million registered users, is leveraging payments as a distribution layer rather than a primary revenue engine.
| Photo Credit:
SAMYUKTA LAKSHMI
Walmart-backed fintech major PhonePe is sharpening its financial services play ahead of its proposed public listing, as lending and insurance distribution emerge as key growth drivers beyond its core UPI business.
Revenue from the lending and insurance distribution segment has surged from ₹28.05 crore in FY23 to ₹557.65 crore in FY25, clocking a compound annual growth rate of over 345 per cent. In the first half of FY26 alone, the segment generated ₹452.62 crore, nearly doubling from ₹216.78 crore a year earlier. Its contribution to total revenue has steadily risen from 0.96 per cent in FY23 to 7.84 per cent in FY25, and further to 11.55 per cent in H1 FY26.
PhonePe, which built its scale on the Unified Payments Interface (UPI) with over 657 million registered users, is leveraging payments as a distribution layer rather than a primary revenue engine. Operating as a lending service provider, it connects borrowers with banks and NBFCs, earning commissions without taking on direct credit risk.
Since launching its lending distribution business in March 2023, partner-led lifetime disbursals have reached ₹14,270 crore, with coverage across nearly 99 per cent of India’s pin codes. Merchant lending and small-ticket consumer loans form a significant part of this portfolio.
In insurance, PhonePe has facilitated the sale of 18.49 million policies, with a total premium value of ₹2,290 crore across 29 partners. It has also built a presence in digital motor insurance and expanded into bite-sized “sachet” products tailored to specific risks.
In FY25, the company reported operational revenue of ₹7,114 crore, up 40 per cent year-on-year, with adjusted EBITDA of ₹1,477 crore and adjusted PAT of ₹630 crore. As it prepares for its IPO, PhonePe’s pivot towards higher-margin, commission-led financial services could materially reshape its earnings profile.
Published on February 14, 2026